Providing perspective on the economics and politics of sports business in Florida...and the Rays' campaign for a new stadium in Tampa Bay.

Tuesday, March 31, 2015

MLB Commish Tells Montreal To Hurry Up With New Stadium So He Can Threaten Tampa Bay With It

Hot off the presses, the Associated Press reports MLB Commissioner Rob Manfred says Montreal needs a commitment for a new stadium if they want any chance of bringing baseball back. An excerpt:

“The key thing in Montreal would be to have a plan for
an adequate facility that could support baseball over the long haul,”
he told The Canadian Press just a few days before Montreal hosts two
exhibition games between the Toronto Blue Jays and Cincinnati Reds at
Olympic Stadium.

Manfred said the league prefers to make baseball work
in existing markets, despite the troubles some cities have been facing,
such as Tampa Bay and Oakland.

“But we have always been realistic,” he said. “At the end of the day, relocation to another market could be the only solution.”

Manfred said the league would need a strong commitment
from Montreal for a new stadium before the league could seriously
consider relocating a team or expanding there.

“I don’t expect people to go into the ground and build
a facility without some sort of commitment that they are going to get a
team,” he said. “But I do think that you need a plan, and a commitment
to how that plan is going to be executed.”

...

While the Expos failed to draw 1 million spectators to
Olympic Stadium in any of their final seven seasons, a total of 96,350
fans attended a pair of exhibition games there in March 2014 between the
New York Mets and Toronto Blue Jays.

One thing's for sure - the commissioner is learning important lessons about creating leverage.

The December 2013 Feasibility Study stated this in plain terms. Nothing has changed in this regard. But just remember, the Nationals played at RFK for 3 seasons while a new ballpark was being built. I can't imagine a situation whereby MLB wouldn't allow something similar to happen in Montreal, i.e., a firm commitment on a new ballpark with shovel in the ground the day that a team is relocated to Montreal or an expansion team is awarded.

So all they need is a plan for a new stadium? That's the same position Tampa-St. Pete is in. Manfred also acknowledged that he is "realistic" and that "relocation to another market could be the only solution"... sounds like a race to come up with a stadium plan between Montreal and Tampa-St. Pete.

Why does it matter to the Tampa Bay area whether Stu owns the franchise? How does that fact/"threat" affect anything? The deal is between the city and the Rays entity. Maybe a benevolent billionaire comes in and buys the team and half of St. Petersburg, like Jeff Vinik has done in Tampa with the Lightning. Or maybe Sternberg sells to a worse ownership group. In any scenario, the Rays will play for 12 more years or pay adequately for the right to look elsewhere and then pay adequately for the right to leave. Baseball might go experiment elsewhere with its community wealth extraction business model. Maybe the league finds something more sustainable for smaller markets. If the Rays left there would be a collective "meh" in Tampa Bay, and much hand-wringing from the papers (if they are still a thing). "Stu said he will not be the owner in 2020." Well, neat. Whoever the owner is in 2020 will continue to have the same legal obligations. So give the 2020 faux-deadline nonsense a rest. You don't know what you are talking about. What's Stu gonna do? Sell to an ownership group that wants to leave St. Petersburg? What a change that would be! You see, Stu's threat is empty because the end result is the same either way. The only variables are who pays St. Pete and how much? The revised MOU was still the City Council's only bite at the apple, since the council was still required to approve the terms of any termination amendment that the Rays/Mayor came back with after a few years of exploring. The MOU released the Rays from a lot, in exchange for very little.

I agree with this. As you have said before, these are all fake deadlines, designed to create pressure. The 2020 deadline for Sternberg's ownership means nothing to the negotiation, because the next owner is just as obligated to play in St. Pete until 2027. Build me a stadium or I won't be the owner in 2020! Lol, k, just make sure the next guy knows where to drop off the rent checks and where the complaint box is. Thanks. #awfultenant

Considering Manfred's contract as a commissionner will end in January 2020 (before being renewed or replaced by a new commissionner), something must happen before the end of his mandate for sure. It will not take more than 5 or 7 years.

Ughhhh, how does Manfred's contract have anything to do with any of this? I spent all of that time talking about how the individual people don't matter. Law stuff. And you say, welp Manfred is leaving in 4 years. Ugh. /facepalm. You are doing it wrong.

Clearly St. Pete is so low class. The citizens of St. Pete do nit support the team. MLB will not be in St. Pete. The citizens of St. Pete and the citizens clearly are ignorant. When the Rays leave will have nothing. You can't count the beaches, because they are located in beach towns. St.Petersburg Florida a low class city with a low class population.

Well said. Stu Sternberg has more than fair with St.Pete. I drive through St. Pete and it is a dead zone. So excited for the Montreal Rays. The only established business around the Trip is Fergs. Honestly Fergs is a dump. St. Pete's citizens and the city council do not love in reality. Go Montreal Rays!!!!!

Here is an update from Montreal. Some facts are not 100% accurate about the penalties to get out of the Use Agreement, but considering the size of such deal (buying the Rays), the comments are very interesting and give us another point of view.

"However, taking into account the transactions that occurred in recent years in MLB, there is a safe bet that the Rays would sell around 900 million or a billion, if they were available on the market. Taking into account the exchange rate, we are talking about an initial investment of 1.2 to 1.3 billion Canadian dollars.

"Who has deep enough pockets to Quebec to extend such a sum or to participate in such a financial arrangement?"

There are three point of views/scenarios on this financial ownership question:

1) Most likely, an existing owner will sell part of his stake to a consortium (few deep pocket companies/individuals like Bell Media, Bronfman, Gerber, ... see the list of names that was published last Fall in La Presse).

2) One scenario is investors from China with a local group of owners (like in #1). Still explanatory.

3) Few major players like Bell Media and Labatt (beer company) that need such asset for the content, exposure.

During the Reds vs Jays games this weekend, important decisions will be made by those investors because they can't wait another year or two to confirm their plan or intentions. Manfred is expecting clear plan and engagements in the next 12-18 months for a new stadium AND investors. Then, it will be a mater of time (1, 2, 5, 7 years, who knows) when the announcement of a team moving or a new francise will be made.

It is no longer a question of IF a team will be in Montreal, it is a question of when.

I would enjoy listening to the Anheuser-Busch InBev (Labatt's parent company) quarterly earnings call following the purchase of a sports franchise. "Soooo... as you know, we just spent 600M on a 51% interest in the Tampa Bay Rays. Now we need to spend $500M or so on a stadium in Montreal. We see, uhhhh, some synergies or something."

St. Pete sold out tickets to the Sweet 16 and Final Four, but that didn't mean we were getting a college basketball program. Amalie Arena--where the Lightning play--is going to sell out every night of Frozen on Ice in mid-May, but that doesn't mean Elsa is going to move here permanently. Congrats on your two exhibition games. Great turnout. Lastly, Go Bolts! 5 and 0 against the Habs this season. Stomped.

I hate to be the elephant in the room here BUT does anybody realize that baseball is dead in Tampa Bay or in Florida for that matter and Montreal WILL eventually get their team back. I am travelling 9 hours just to be there this wekend to support getting the EXPOS back...BTW...how many season tickets have the Rays sold this year???? Noah, I look for your response......

Noah, typical... you did not answer my question. How many season tickets have the Rays sold this year? Speaking on supporting a team 10-20 years down the road....how was attendance at the TROP when the Rays were in the playofs all those years (GULP)

Noah, 90k+ tickets sold two years in a row with a huge event in town (and outside on the MLB planet, ask the other team owners and players, there is a line-up to play in Montreal next year) only demonstrate that local investors must act now or very very soon.

Not in 2 or 3 years, Because will not fill the big O for ten or fifteen years, waiting for a team. And Manfred knows that for sure. He talks about Canada and Mexico for international plan before talking about any cities in the US. So it's a matter of time (2-3 years) before new teams will be added (at least 2).

And local, provincial and Canadian governments needs to sit down once the investors group is serious with money on the table to prepare a plan that all parties agree. No more, no less, no matter where the investments are coming from (public, para-public or private).

That's it.

If the investors/MLB/governments don't get it, then we will move on with other projects. We are very creative people, you know!

1) I can't answer the season ticket question because the Rays won't release the info.2) The attendance at the Trop is cratering the same way it did in Montreal, yes.3) The 90k tickets for a spring weekend in Montreal means very little.4) There will be no expansion or relocated teams in the next 2-3 years...that's crazy. Don't believe the hype.

2) It is partially true. But remember, Montreal had a real ownership/investment problem at the time and there was no revenue sharing at the time with a US currency that was very strong. People (especially the Rays today based on Forbes numbers) should be proud of what Montreal accomplished before they left because they were the leader amongst the owners to put in place a revenue sharing program. With such program back in the 90's and the 2000's, the investors would be there considering the profitability with such revenues.

3) Every little steps means something. Same thing for the Rays when they try to get a deal wit small actions/steps. It is a marathon, not a 100m run!

4) Manfred openly talk about where Baseball need to go. International. first 3-4 years, he will prepare the ground, next mandate, he will move forward.

Regarding relocations, it's up to the owners, the MLB and the cities/local communities to get things done (no matter who will ro won't invest). What I'm saying is that within 1-2 years, complete plan must be ready in Montreal and approved by MLB. The team (new or relocation) may come later but at least, the plan is clear and well known.

What we do expect in 2-3 years, is regular MLB games in Montreal. Not just pre-seasons ones. And probably the Jays (not the Rays!) will accept to play games in Montreal (and probably Vancouver, why not) to get more exposure.

By doing so, TV ratings will increase, MLB will gain more traction in Canada, and it will keep the flame up.

I predict Rays vs Jays 3 games series in Montreal in 2016 if the MOU is still pending at the end of 2015! With Manfred in Montreal this time.

3) Just heard that journalists from Montreal are not able to attend the two games at the Big O. They must buy their tickets.

The reason, too many US journalists asked for accreditations to be on site and talk about this incredible event, baseball is back in Montreal. This is a full house press box for two days.

Sorry Noah, if you want to be part of this big event, you will need to buy your tickets.

P.S. Scoop: More than 90 000 tickets sold as of this afternoon. The goal is to have at least 96 500. Considering that last year, 15 000 tickets were sold in the last 2 days, we should be able to have more than 100 000 people.

Maybe 90 000 tickets means very little, but what about 100 000+ people with all those US journalists talking about the Expos!

Neat, go ahead and build it. You and the Rays can pay well to have them leave now or pay well to leave later. Knock yourselves out.

But do think for a second about whether maybe MLB is using the Rays to leverage even more money out of the Montreal community than it might have otherwise. If you play it a little cooler (use a couple fewer exclamation points), you might get a better deal on either the expansion team or on the Rays' arrival. Be cool, man, be cool.

The leverage game goes in every direction, so don't act too eager. St. Petersburg has been in your position before, as the stadium relocation mistress. Be students of the St. Petersburg MLB experience. Don't forget that you, Montreal, as the f**kor, can quickly become the f**kee.

"But remember one thing: the faster the situation in Oakland and Tampa Bay is resolved, the faster we get a team."

Exactly! Expansion is stuck until these stadium issues in Oakland and St Pete are settled. If we could just get an indication that either city is even possibly considering maybe thinking about making an agreement, well, then we'd have little to discuss on here. Plus I'd really love to watch an Expansion draft, after missing the last one.

Don't bet on expansion. If we are to believe MLB needs new stadiums in TB/OAK so the rich teams don't have to share so much revenue, then it would make zero sense to add more mid-market ballclubs to dilute the revenue pool.

The fact is, baseball stadiums have to fall into one of two categories, either a) Modern or b) Historically significant with modern amenities. Because Tampa Bay and Oakland's stadiums don't fall into either category, MLB will continue to put pressure on these regions. There is a a reason why the All Star game will never be played at either of those locations moving forward. I'm not saying it is right or wrong, but just that it is a reality.

And if we want to get into other cities having ownership groups and stadiums lined in in "North Carolina, San Antonio, Las Vegas, Portland..." keep in mind that each one of these cities currently falls into other MLB teams' "turf," so that brings up even more legal issues. Plus, not to put down to good folks of San Antonio, but last year while Montreal drew 95,000 plus for two games, the Alamo Dome had only 50,000 for two Rangers/Astros games.

Noah, you keep saying 90,000 for 2 games per year means nothing. I agree that it doesn't mean they'll average 40,000+ per game over 81 games. But what else are citizens of any potential MLB market supposed to do to attract the baseball community? You say it means nothing, well what can the people do that actually does mean something?

If an owner is looking to relocate or a local billionaire is looking to buy a ball club, how will they know a certain population (not government) is interested? By attendance at exhibition games, no?

Expansion is a pipe dream, regardless of if and when the Rays and A's soap operas get settled. All it would do is create two more bottom feeding franchises. And maybe MLB learned its lesson from the last expansion done in 1998 (Devil Rays and Diamondbacks), where 3 years later MLB was seriously considering contraction.

Plans are in place for an ownership group and a stadium in Montreal. Sternberg knows that.

The Caisse de depot has $303B in cash and the strategy is to invest in Quebec infrastructure. Dummies do not run the Caisse, it had 12% return last year. Sternberg knows that.

You keep talking about a TV deal in Tampa, Peanuts compared to the $5B in cash Bell media has at the ready. Sternberg knows that.

Sternberg talks about a pinpoint perfect location for a new stadium. Why don't you report that it does not exist in Tampa or St. Pete? Why don't you acknowledge that building a stadium there is throwing good many after bad.

Assuming that a pinpoint perfect location exists and there will be some sort of public funding, do you really believe that Sternberg will invest a single dollar towards the stadium? All that equates to zero chance! C'mon Noah, wake up!

While TB is stuck trying to find a way to let the Rays talk to other cities or let the Rays buy (at a higher price) the rights to talk to other cities, Montreal is doing their homeworks.

Ask Sternberg to invest another $300M or $400M for a stadium and guess where he will put such money? Somewhere in Florida? I doubt.

Bell Media can make an offer to buy the TV rights at a higher price if the team is in Montreal than what Stu will get from local televisions in 2017. So this is why Stu need to get a way to have a MOU in order to weakened the "Irreparable Damages" clause of the Use Agreement.

Ask the other owners and teams players where they want to play. In North Carolina, San Antonio, Las Vegas, Portland... or in Montreal?

So a US city? No. Even if they have lot's of money. Let's remember what Manfred said.

SHAIKIN: Montreal is working hard to get an MLB team back. Are there any thoughts of expansion?

MANFRED: There has not been a lot of talk about expansion. In terms of internationalizing the game, North America, in terms of sustained international activity, is someplace we need to focus. Canada, Mexico, if we were going to think about it, those would be the kinds of places that I would be interested in.

SHAIKIN: With the markets you would look at it in North America, would it seem as if your best available markets are not United States markets?

Regarding the investors: "They are serious, ready, money is not an issue. A plan need to be made (private investments, stadium, team) and several options need to be analyzed.

Once the plan is clear and approved by the parties, then public authorities/stakeholders (city, province, country) will be included in the discussion. It is not the right time to talk about what every public stakeholders need to bring to the table. We're not there yet.

That being said, let's have fun with the 2 games. We'll sit down with Manfred in the next few weeks, the agenda is about to be confirmed.

And don't worry, we will say what we will do and we will do what we said."

Montreal people, stop and take a breath here. Let's table this discussion and pick it up again in seven years, which will be six years from the start of the 2028 season. MLB and the Rays ownership might look very different then. Montreal and St. Petersburg will probably look very different too.